Title of Rule: WAC 415-108-425 How do I determine if I
have choice rights or transfer rights to PERS Plan 3?

Purpose: This rule is being amended to explain that a
member who transfers from PERS to SERS, and then back to PERS,
will have choice rights. The amendment reflects existing DRS
practice and procedure.

Summary: This rule is being amended to explain that a
member who transfers from PERS to SERS, and then back to PERS,
will have choice rights. The amendment reflects existing DRS
practice and procedure.

Reasons Supporting Proposal: This amendment is necessary
as part of implementing the Public Employees' Retirement
System Plan 3.

(e) "Phase 1 transfer period" is the period from March 1,
2002, through and including August 31, 2002.

(f) "Phase 2 transfer period" is the period from
September 1, 2002, through and including May 31, 2003.

(2) What determines if I have "choice rights" or
"transfer rights"? Your current employment status and your
employment history will be used to determine if you have
choice rights or transfer rights. If your employment status
changes, your rights must be reevaluated. A change in your
employment status, such as separating from employment or
becoming reemployed, may change your rights.

(3) What are "choice rights" and how are they applied?
"Choice rights" refers to your right, within a ninety-day
period, to make an irrevocable choice to become a member of
Plan 2 or Plan 3.

(a) You will be reported in Plan 2 until you exercise
choice rights.

(b) You must make a choice within ninety days of your
first day of employment in an eligible position.

(c) You will be defaulted into Plan 3 if you continue
employment past the ninety-day choice period without making a
choice.

(d) You may exercise choice rights only once.

(4) Do I have "choice rights"?

(a) You have choice rights if your initial PERS
membership began on or after March 1, 2002, with a Phase 1
employer in an eligible position.

(i) If you separate from employment and did not exercise
your choice rights, you retain choice rights if you are
reemployed in an eligible position with a Phase 1 employer.

(ii) If you separate from employment and did not exercise
your choice rights, and you are not employed by a Phase 2
employer during Phase 2, you retain choice rights if you begin
another period of employment in an eligible position with a
Phase 2 employer after May 31, 2003.

(b) You have choice rights if your initial PERS
membership began on or after September 1, 2002, with a Phase 2
employer in an eligible position. If you separate from
employment and did not exercise your choice rights, you retain
choice rights if you begin another period of employment in an
eligible position with a Phase 1 or Phase 2 employer.

(c) You have choice rights if you transferred from
membership in PERS to membership in the school employees'
retirement system and then became employed in an eligible PERS
position on or after March 1, 2002, with a Phase 1 employer or
on or after September 1, 2002, with a Phase 2 employer.

(5) What are "transfer rights" and how are they applied?
"Transfer rights" refers to your right as a Plan 2 member to
transfer into Plan 3 during an applicable transfer period to
your employment type.

(a) You are not required to exercise transfer rights. If
you have transfer rights, you will remain in Plan 2 unless you
decide to transfer to Plan 3.

(b) If you do not transfer to Plan 3 during the Phase 1
or the Phase 2 transfer periods, you will not qualify to
receive the additional transfer payment under RCW 41.40.795 or
retroactive gainsharing payment under RCW 41.31A.040.

(6) Do I have transfer rights?

(a) You have transfer rights if you:

(i) Are a Plan 2 member;

(ii) Are employed in an eligible position by a Phase 1
employer during the Phase 1 transfer period; and

(iii) Were not eligible for choice rights under
subsection (4)(a) or (c) of this section.

(b) You have transfer rights if you:

(i) Are a Plan 2 member;

(ii) Are employed in an eligible position by a Phase 2
employer during the Phase 2 transfer period; and

(iii) Were not eligible for choice rights under
subsection (4)(b) or (c) of this section.

(7) What are "January transfer rights" and how are they
applied? "January transfer rights" refers to a Plan 2
member's right to transfer to Plan 3 during any January after
the close of a transfer period.

(a)If you are employed by a Phase 1 employer, in an
eligible position, the first January you can transfer is
January 2003.

(b) If you are employed by a Phase 2 employer, in an
eligible position, the first January you can transfer is
January 2004.

(c) You must earn service credit in the January in which
you transfer.

(8) Do I have January transfer rights?

(a) You have January transfer rights if you were eligible
for transfer rights and did not transfer to PERS Plan 3 during
the transfer period that applied to you.

(b) You have January transfer rights if you:

(i) Were employed in an eligible position with a Phase 1
employer before the Phase 1 transfer period, or were employed
in an eligible position by a Phase 2 employer before the Phase
2 transfer period;

(ii) Were not employed by a Phase 1 employer during the
Phase 1 transfer period;

(iii) Were not employed by a Phase 2 employer during the
Phase 2 transfer period; and

(iv) Are employed by a Phase 1 employer in an eligible
position that you began after the Phase 1 transfer period
ended, or are employed by a Phase 2 employer in an eligible
position that you began after the Phase 2 transfer period
ended.

(9) What happens after I become a Plan 3 member? Once
you choose Plan 3 or default to Plan 3 or transfer to Plan 3,
you will remain a Plan 3 member. You will not have any
additional transfer rights or choice rights to exercise.

(10) What rules apply to me if I am concurrently
employed? If you are, or become concurrently employed during
the Phase 1 transfer period in an eligible position, you will
have transfer rights but must wait until the Phase 2 transfer
period to transfer. If you separate from one of the
employers, your membership rights must be reevaluated.

Examples:

The examples are written, for the
most part, for a Phase 1
employer. Use the Phase 2
transfer period (September 1,
2002, through and including May
31, 2003) to apply the rules to a
Phase 2 employer.

Plan Choice Rights:

Example 1: Pat starts working for a state agency in an
eligible position (Phase 1 employer) as of:

A. April 1, 2002. Since Pat has not previously been a
member of PERS, Pat has ninety days to make a plan choice for
Plan 2 or Plan 3. See subsection (3)(b) of this section.

B. After forty-five days, Pat leaves service without making
a choice, and then returns in an eligible position one year later. Pat has a new ninety day period in which to make his plan
choice. See subsection (4)(a)(i) of this section.

C. Pat chooses Plan 3 within his ninety days. Pat is now a
Plan 3 member regardless of future employment. See subsection
(9) of this section.

D. Instead of choosing Plan 3, Pat lets his ninety day plan
choice period go by with out choosing Plan 2 or Plan 3. Pat is
defaulted into Plan 3 and is now a Plan 3 member regardless of
future employment. See subsections (3)(c) and (9) of this section.

Transfer Rights:

Example 2:

A. Chris has been a Plan 2 member since 1977. Chris is
working at a state agency (Phase 1 employer) as of March 1,
2002. Since Chris was a member prior to the start of Plan 3,
Chris has the right to transfer to Plan 3 in the transfer period
(March 1, 2002, through August 31, 2002). See subsection (6)(a)
of this section.

B. However, Chris did not make a decision to transfer
prior to the close of the Phase 1 transfer period. If Chris
remains employed for a Phase 1 employer, the right to transfer to
Plan 3 is limited to January of each year. See subsection (8)(a) of
this section.

C. In this variation, Chris was a Plan 2 member from March
1, 1987, through February 1, 2002. Chris returns on October 15,
2002, for a state agency (Phase 1 employer). Since Chris returned
to service after the transfer period (March 1, 2002, through
August 31, 2002), Chris only has the right to transfer to Plan 3 in
January of each year. See subsection (8)(b) of this section.

Irrevocable Choice Rule:

Example 3: Mike starts working for a state agency (Phase 1
employer) as of April 1, 2002. Since Mike has not previously
been a member of PERS, he has ninety days to make a plan
choice for Plan 2 or Plan 3. Mike chooses Plan 3 within his
ninety days. Mike is now a Plan 3 member regardless of future
employment. See subsection (9) of this section.

Example 4: Pat starts working for a state agency (Phase 1
employer) as of April 1, 2002. Since Pat has not previously been
a member of PERS, he has ninety days to make a plan choice for
Plan 2 or Plan 3. Pat chooses Plan 2 within his ninety days. Pat
is now a Plan 2 member who can no longer have a plan choice
regardless of future employment. See subsection (3)(d) of this
section.

Concurrent Employment in Phase 1 and 2:

Example 5: Using example 2A, Chris also accepts
employment for a county (Phase 2 employer) on April 1, 2002,
prior to transferring to Plan 3. Since Chris is concurrently
employed at a Phase 1 and a Phase 2 employer, Chris must wait
for the Phase 2 window before he can transfer to Plan 3. See
subsection (10) of this section.